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The FIDIC Suite of Contracts

Less well know FIDIC contracts are also
available such as the Turquoise Book for
Dredging and Reclamation Works published in
January 2006 and the White Book model
services agreement published in October 2006

The FIDIC suite of contracts now covers a
wide range of projects and methods of
procurement. It is therefore likely that any
international contractor or consultant working
outside of the UK will frequently encounter
Introduction FIDIC conditions of contract.
The FIDIC suite of contracts
Sub-contractors will similarly encounter FIDIC
The FIDIC suite of construction contracts is derived conditions of contract where they are
written and published by the International operating internationally. Even subcontractors
Federation of Consulting Engineers. The FIDIC that only operate within a particular country
acronym stands for the French version of the will from time to time encounter FIDIC
Federation’s name (Federation Internationale derived conditions where they are operating
des Ingenieurs-Conseil). within a supply chain governed by a FIDIC
main contract.
The best known of the FIDIC contracts are the
Red Book (building and engineering works Employers may also use FIDIC conditions
designed by the Employer) and the Yellow where the local standard conditions of
Book (M&E, building and engineering works contract are not suited to the procurement
designed by the Contractor). The original route and there is a need to avoid the risks
edition of the Red Book dates back to 1957. and expense of preparing a bespoke contract.

In recent years FIDIC has published many The different forms of contract within the
new contracts to complement the suite. The FIDIC suite are organised around the extent
first of the new contracts was the Orange of design and other responsibilities assumed
Book for design, build and turnkey works by the Employer and the Contractor. The suite
published in 1995. is therefore now aligned with common
procurement strategies rather than the nature
In 1999 FIDIC published a revised suite of of the construction works.
contracts with updated versions of the Red
and Yellow books together with a Green Book Where works are predominantly designed by
as the short form of contract and a Silver the Employer, then the Red Book is the
Book for turnkey contracts. appropriate form of contract. Where works
are predominantly designed by the Contractor
More recently in 2005 FIDIC published an the Yellow Book is appropriate regardless of
amended version of the Red Book for use by whether the works were heavy civils or M&E.
Multilateral Development Banks and in 2007 The Silver Book is clearly intended for use on
published a seminar edition of the Gold Book Turnkey projects and the Gold Book where
for Design, Build and Operate contracts.

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The FIDIC Suite of Contracts

the contractor operates the asset in addition taken to ensure that no ambiguity is created,
to designing and building. either with the General Conditions or between
the clauses in the Particular Conditions. It is
Employers may benefit from utilising FIDIC essential that all these drafting tasks, and the
conditions where potential bidders are from entire preparation of the contract documents,
different countries. In such cases the bidders are entrusted to personnel with the relevant
may perceive the use of the familiar FIDIC experience of the contractual, technical and
conditions as increasing the attractiveness of procurement aspects of the project.
enquiry. This could translate into lower
tenders as the contract risks should be better The suite does not currently include a
understood by the bidders. standard form of subcontract although in
2004 FIDIC stated that a Subcontract form
The FIDIC forms can therefore be applied to a would be a desirable addition to suite. It is
wide range of differing engineering and expected that if a subcontract form is
construction projects; from traditional civil published that a version for use with the Red
engineering to hi-tech windmills and heavy Book main contract will be first.
duty oil and gas process plants.
The main forms of contract are described
FIDIC has reduced the number of clauses in further in some detail below
all of the recent contracts. The Orange Book
contained 20 clauses, as now do the Red,
Yellow and Silver Books. Previously, the Red
Book had 72 clauses.

FIDIC has also standardised the terms across
the full suite so that wherever possible the
same words and definitions have the same
meanings and the clauses are now grouped in
a logical manner across all the contracts.

Knowledge of one form of FIDIC conditions is
therefore of immediate benefit in respect of
other forms.

Each of the main conditions of contract in the
suite now contains a core of common
conditions with little significant difference
between them.

Amendments to the standard published FIDIC
contracts are incorporated by the inclusion of
Particular Conditions and guidance on how to
prepare the Particular Conditions is published
by FIDIC. Where Particular Conditions are
incorporated into the contract care must be

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The FIDIC Suite of Contracts

Under the usual arrangements for this type of
contract, the Contractor constructs the Works
in accordance with design provided by the
Employer. However it may also be suitable for
contracts which include, or wholly comprise,
the contractor’s design.

An area of potential concern for Contractors is
that there is no reference to an impartial
Engineer in the contract. The contract
nominates a member of the Employer’s
personnel as the authorised person to fulfil
the traditional duties of the Engineer.

The intention is that all contract documents
will be incorporated in the Appendices to the
Agreement. The Appendices will therefore
include such documents as the Contractor’s
Green Book offer and the Employer’s acceptance together
Short Form of Contract with all the correspondence in between.
First Edition 1999
The standard General Conditions are intended
to be applicable to the majority of projects
Contents of Contract Book
although it is possible to introduce Particular
Conditions if these are required to amend the 
Agreement
Green Book and provide for special 
General Conditions
circumstances of the project. 
Rules for Adjudication 
Notes for Guidance
To assist in the preparation of tender and
contract documents Notes for Guidance are
The Short Form of Contract is recommended
included within the Green Book. However
for engineering and building work of relatively
these notes do not form part of the Contract.
small capital value. The Guidance Notes for
the Green Book recommended that generally
It is interesting to note that the Green Book
it should not be used on projects with a
includes Rules for Adjudication which is an
contact value greater than US$500,000.
innovation for a suite of contracts that is
traditionally thought of as being relevant to
However, depending on the type of work and
the international market and not domestic to
the circumstances, the Green Book may be
the UK.
suitable for contracts of considerably greater
value.

It is a flexible document containing all the
essential administrative and commercial
arrangements. It is possible to easily amend
and supplement the provisions of the Green
Book with differing options incorporated via
the Appendix.

The Green Book is likely to be most suited
fairly simple or repetitive work or work of
short duration without the need for specialist
sub-contracts.

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The FIDIC Suite of Contracts

such projects it would be more appropriate to
use the Yellow Book or Silver Book.

As with earlier versions of the Red Book
administration of the project and supervision
of the works is carried out by an Engineer
who is employed by the Employer. The
engineer is responsible, amongst other things,
for issuing instructions, certifying payments
and determining completion.

Payments are normally determined by
measurement and applying the rates and
prices from the bill of quantities. There is an
option for payment to be on the basis of a
Red Book lump sum.
Conditions of Contract for Construction
For Building and Engineering works Where the engineer is required to determine a
designed by the Employer matter or settle a claim he is required to
consult with each of the parties to try and
First Edition 1999
reach an agreement. If agreement cannot be
reached the engineer must make a fair
Contents of Contract Book determination taking due regard of all 
General Conditions relevant circumstances. 
Guidance for the Preparation of the
Particular Conditions If an engineer’s determination is not agreed 
Forms of Tender and Contract Agreement by either of the parties then the dispute will 
Dispute Adjudication Agreement be referred to a Dispute Adjudication Board
for a decision. The DAB is formed of one or
The Red Book provides conditions of contract three people who are jointly appointed by the
for construction works where the design is parties. If the decision of the DAB is not
carried out by the Employer. The current Red accepted by any of the parties then the final
Book bears little resemblance to its step will be resolution via an international
predecessors. Earlier versions of the Red Book arbitration.
were drafted for use on civil engineering
projects. The current edition drops the words The General Conditions and the Particular
“civil engineering” from the title and this Conditions together comprise the Conditions
signifies a move away from the Red Book only of Contract. Guidance is provided in the Red
being applicable to civil engineering works. Book for the preparation of Particular
Conditions should it be necessary to modify
In line with the rest of the FIDIC suite the the General Conditions. The Guidance also
focus is now more on type of procurement contains various forms of security such as
rather than the nature of the works. The Red parent company guarantee, advance payment
Book is therefore applicable to any bond and a retention guarantee which can be
construction works were the Employer carries selected as applicable to the contract via the
out the design. Particular Conditions.

The Red Book is intended for use on projects This Red Book concludes with example forms
where the employer carries out the design but for the Letter of Tender, the Appendix to
it also allows for some elements of the project Tender (providing a check-list of the sub-
to be Contractor designed. The Red Book is clauses which refer to it), the Contract
not suitable for use where most of the works Agreement, and a Dispute Adjudication
are to be designed by the Contractor and for Agreement.

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The FIDIC Suite of Contracts

 International Bank for Reconstruction and
Development (The World Bank)
 Islamic Bank for Development Bank
 Nordic Development Fund

It is expected that all of the participating
MDBs will adopt this edition of the FIDIC
document in their standard bidding
documents in the future.

Use of these MDB conditions should
significantly reduce the number of additions
and amendments to be included in the
Particular Conditions.

Red Book (MDB edition) Nevertheless, most projects will have special
Conditions of Contract for Construction requirements which will necessitate some
For Building and Engineering works specific changes. The contract therefore
designed by the Employer retains provision for Particular Conditions as is
common with other FIDIC contracts.
MDB Edition 2005
As with the main Red Book this MDB edition
Contents of Contract Book also includes sample forms for Contract Data,
Securities, Bonds, Guarantees and Dispute 
General Conditions Board agreements. 
Guidance for the Preparation of the
Particular Conditions In most cases, the amendments which have 
Forms of Tender and Contract Agreement been made to produce the MDB edition are 
Dispute Adjudication Agreement those arising from the requirements of the
MDBs, except for some minor changes of an
As part of their standard bidding documents editorial nature.
the Multilateral Development Banks (MDBs)
have for a number of years required their However, in the case of the dispute provisions
borrowers or aid recipients to adopt the FIDIC contained in Clauses 20.2 to 20.8 and in the
Conditions of Contract. associated Appendix, the opportunity has
been taken to make other amendments which
The FIDIC MDB edition of the Red Book FIDIC considered an improvement on the
simplifies the use of the FIDIC contract for the earlier wording as contained in the Red Book
MDBs, their borrowers and others involved 1999 edition.
with project procurement, such as consulting
engineers, contractors and contract lawyers.

The following MDBs that have all participated
in the preparation of this edition of the Red
Book: 

African Development Bank 
Asian Development Bank 
Black Sea Trade and Development Bank 
Caribbean Development Bank 
European Bank for Reconstruction and
Development 
Inter-American Development Bank

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The FIDIC Suite of Contracts

Administration of the project and supervision
of the works is carried out by an Engineer
who is employed by the Employer. The
Engineer is responsible, amongst other
things, for issuing instructions, certifying
payments and determining completion.
Interim payments of the lump sum Contract
Price are made as work proceeds, and are
typically based on instalments specified in a
schedule

Where the engineer is required to determine a
matter or settle a claim he is required to
consult with each of the parties to try and
reach an agreement. If agreement cannot be
Yellow Book reached the engineer must make a fair
Conditions of Contract for determination taking due regard of all
Plant and Design-Build relevant circumstances. If an engineer’s
determination is not agreed by either of the
For electrical and mechanical plant, and for
parties then the dispute will be referred to a
building works, designed by the Contractor
Dispute Adjudication Board for a decision. The
First Edition 1999 DAB is formed of one or three people who are
jointly appointed by the parties. If the
Contents of Contract Book decision of the DAB is not accepted by any of 
General Conditions the parties then the final step will be 
Guidance for the Preparation of the resolution via an international arbitration.
Particular Conditions 
Forms of Tender and Contract Agreement The General Conditions and the Particular 
Dispute Adjudication Agreement Conditions together comprise the Conditions.
Guidance is provided for the preparation of
The Yellow Book provides conditions of Particular Conditions should it be necessary to
contract for construction works where the modify the General Conditions. The Guidance
design is carried out by the Contractor. The also contains various forms of security such
current Yellow Book bears little resemblance as parent company guarantee, advance
to its predecessors. The current edition drops payment bond and a retention guarantee
the words “electrical and mechanical works” which can be selected as applicable.
from the title and in line with the rest of the
FIDIC suite the focus is now more on type of The General Conditions as drafted may not
procurement rather than the nature of the suit the Employers particular needs (for
works. example the standard inclusion of advance
payments). Care must be taken in the
The Yellow Book is therefore applicable to the preparation of the Particular Conditions and
provision of electrical and/or mechanical completion of the Appendix to avoid creating
plant, and for the design and execution of ambiguities around such conditions. A major
building or engineering works. Under the area for consideration when preparing
usual arrangements for this type of contract, Particular Conditions is the risk allocation for
the Contractor designs and provides the ground conditions which is an Employer risk in
works in accordance with the Employer’s the standard draft.
requirements which may include any
combination of civil, mechanical, electrical The Yellow Book concludes with example
and/or construction works. forms for the Letter of Tender, the Contract
Agreement, and a Dispute Adjudication
Agreement.

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The FIDIC Suite of Contracts

The Orange Book is drafted for use where the
Contractor carries total liability for design. For
the Employer, such single-point responsibility
may be advantageous, but the benefits may
be offset by having less control over the
design process and more difficulty in imposing
varied requirements.

Under the usual arrangements for a design-
build contract, the Contractor is responsible
for the design and provision of works. The
works may include any combination of
engineering (including civil, mechanical,
electrical, etc) and building works.

Orange Book The Orange Book is intended for use on
Conditions of Contract for turnkey contracts, under which the
Design-Build and Turnkey Employer's requirements usually include
provision of a fully-equipped facility, ready for
First Edition 1995
operation at the turn of a key. The exact
Employer requirements will need to be fully
Contents of Contract Book detailed to describe the design, construction, 
General Conditions fixtures, fittings and equipment required to be 
Guidance for the Preparation of the provided by the Contractor’s design.
Particular Conditions 
Forms of Tender and Agreement When used for turnkey projects it may be
necessary to impose a requirement for the
The Orange book was published in 1995 to Contractor to operate the Works, either for a
provide a design and build option to the then few months' commissioning period, or for
current FIDIC suite. The Orange Book was the some years' operation on a build-operate-
first FIDIC contract to adopt the now current transfer basis. If this is the case then the
FIDIC style of drafting and was a template for FIDIC Gold Book may now be more
the drafting teams when preparing the 1999 appropriate.
suite of contracts.
There are many sub-clauses within the
When the Orange book was published the Red Orange Book which FIDIC decided were
and Yellow Books were still aimed at generally applicable and these are included in
procurement of civil engineering and plant Part I - General Conditions. The Orange Book
installation respectively. At the time it added is arranged to accommodate modification and
a clear design and build and turnkey option supplementing of the General Conditions by
into the available suite of contracts. the inclusion of Part II - Conditions of
Particular Application. The Orange Book
Since the publication in 1999 of the latest Red contains a section of guidance on preparing
and Yellow Books there is now less focus on the Part II conditions. The Part I and Part II
the type of project and more focus on the conditions together govern the rights and
implementation of different procurement obligations of the parties.
strategies. It is now likely that an Employer
requiring a design and build or turnkey
project under a FIDIC contract would use a
1999 edition of the Yellow Book for design
and build or a Silver Book for Turnkey.

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The FIDIC Suite of Contracts

assumes responsibility, subject to some
exceptions, for the accuracy of the Employers
Requirements which is a major difference to
usual design and build contracts.

Given the high level of risk transfer the
Employer must allow time sufficient time in its
procurement programme for the Contractor to
obtain and consider all relevant information
before signing the contract.

Not all risk is passed to the Contractor under
the Silver Book and the Employer still retains
risks for war, terrorism and Force Majeure.
Through the use of Particular Conditions it is
Silver Book possible for the Employer and Contract to
Conditions of Contract for agree alternative risk sharing arrangements
EPC/Turnkey Projects before entering into the Contract.
First Edition 1999
Following award of a project under the Silver
Book the Contractor will be given freedom to
Contents of Contract Book carry out the work in his chosen manner, 
General Conditions provided the end result meets the 
Guidance for the Preparation of the performance criteria specified by the
Particular Conditions Employer. Consequently, the Employer should 
Forms of Tender and Contract Agreement only exercise limited control over the 
Dispute Adjudication Agreement Contractor’s work.

The Silver Book is suitable for use on process, There is no reference to an Engineer in the
power and private-infrastructure projects Silver Book. This is because the Employer’s
where a Contractor is to take on full reduced influence on the engineering
responsibility for the design and execution of generally. Checking of engineering is more
a project. Risks for completion to time, cost concentrated on validating the end-
and quality are transferred to the Contractor performance and validating the potential ease
and so the Silver Book is only suitable for use of operation, maintenance and spares.
with experienced Contractors familiar with
sophisticated risk management techniques. The Silver Book provides conditions relating to
‘Tests on Completion’ and Taking Over only
For many large projects construction is only takes place after successful completion of the
one part of a wider complicated commercial tests. Such provisions are important for
venture and financial or other failure of the EPC/Turnkey projects where the purpose of
construction project will jeopardize the whole the contract is to provide the Employer with a
venture. The Silver Book approach may suit working facility.
such projects as it will provide a greater level
of cost certainty than can be achieved under Guidance is provided for the preparation of
the more traditional forms of the FIDIC suite. Particular Conditions should it be necessary to
modify the General Conditions.
To obtain this increased cost certainty the
Silver Book requires the Contractor to accept As with the other FIDIC contracts the Silver
a higher level of risk than is typical under Book contains various forms of security and
most other forms of contract. The Silver Book concludes with example forms for the Letter
transfers the risk of ground conditions to the of Tender, the Contract Agreement, and a
Contractor. Similarly the Contractor also Dispute Adjudication Agreement.

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Operation Period differs significantly from the
20 years adopted.

The document is recommended for general
use where tenders are invited on an
international basis.

The contract attempts to include all conditions
of a general nature, which are likely to apply
to the majority of DBO contracts, as General
Conditions.

However it is recognised that many employers
or governments, or even different
jurisdictions, particularly if the conditions
DBO Contract were to be used on domestic contracts, may
Conditions of Contract for require special conditions of contract, or
Design, Build and Operate Projects indeed particular procedures, which differed
from those included in the General Conditions.
First Edition 2008
For this reason, the DBO document Particular
Contents of Contract Book Conditions Part B – Special Provisions includes 
General Conditions advice to drafters of contract documents who 
Particular Conditions wish to add Special Provisions to replace or 
Sample Forms supplement the clauses to be found in the
General Conditions.
Following publication of the Orange Book in
1995 and the Red, Yellow and Green Books in Users who wish to adopt the conditions for
1999 it became clear that there was a use with a different scenario (such as a brown
growing need for a contract combining a field operate, design, build) or with an
design-build obligation with a long-term operation period significantly different to the
operation commitment. 20-year period assumed, are referred to the
DBO Contract Guide which identifies the
The approach and layout of the DBO contract clauses which will require amending by
is more similar to the FIDIC Silver book than including Special Provisions, and gives
any other contract within the FIDIC suite. comprehensive guidelines and suggestions on
how the various issues should be addressed.
The DBO contract adopts a “green-field” DBO
scenario with a 20 year operation period and Successful performance of a long-term DBO
a single contract awarded to a single contract requires that the parties fully
contracting entity (which will almost certainly understand the overall time framework and
be a consortium or joint venture) to optimise the need for a long-term commitment by both
the coordination of innovation, quality and the employer and the contractor. It has
performance, rather than award separate therefore been necessary to introduce new
contracts for design-build and for operation. procedures and new terminology which are
not to be found in the other FIDIC forms of
Under the DBO contract the Contractor has no contract.
responsibility for either financing the project
or for its ultimate commercial success.

The DBO contract, as written, is not suitable
for contracts which are not based on the
traditional DBO sequence, or where the

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